United Kingdom

The United Kingdom is one of the major oil producers among IEA member countries but with declining production, it became a net importer of oil in 2006. As reliance on imports is currently only marginal, oil stocks in the country represent well beyond the 90 day minimum net-import cover.

The United Kingdom places a minimum stockholding obligation on industry.

There are no public stocks in the United Kingdom; the country's minimum stockholding requirements are met by placing obligations on industry. The UK government is currently in the process of changing its stockholding regime, modifying the basis for calculating the stockholding obligations on industry over a transitional period of 2007/08.

Directives for stock obligations in the United Kingdom are based on the EU regulations - i.e. they are calculated as deliveries to final consumption in the previous calendar year. The current obligation requires refineries to hold stocks equivalent to 67.5 days of the previous year's deliveries; non-refinery companies (supermarkets and distributors) are required to hold 48.5 days. Other stocks, such as stocks held offshore, can also contribute towards meeting the obligation.

Under the new system, obligations will be based on companies'supply to the market. In the case of refiners, this is defined as production + imports - exports; for non-refining importers, it is calculated solely on imports. Obligations will continue to be based on activity in a previous 12-month period, but this will be brought forward and new obligations will be issued on a quarterly basis.

There are no restrictions on the location of compulsory stocks in the United Kingdom. However, companies must report, on a monthly basis, the location of all stocks held towards an obligation. Compulsory stocks are not held separately from commercial stocks.

Under the EU directive on stockholding, the United Kingdom has formal bilateral treaties with Denmark, Ireland, the Netherlands and Sweden. The United Kingdom also has informal arrangements with Belgium and France. The country also has a bilateral treaty with New Zealand under the IEA International Energy Program, which allows UK companies to hold stocks on behalf of New Zealand.

Companies holding stocks abroad under bilateral agreements must have plans in place to repatriate such stocks in case of an emergency, thereby ensuring that those stocks would be available in the United Kingdom as soon as reasonably possible. The emergency plans would be stipulated in any consent given by the UK government to the stocks being held under the relevant bilateral agreement.